LACERS gets late access to Blackstone

The pension has committed up to $20m to Blackstone’s sixth fund, which has been in fundraising for more than two years and is expected to close any day.

The Los Angeles City Employees’ Retirement System has made a last minute, $20 million commitment to The Blackstone Group’s sixth fund, which has been held open to give access to a few final limited partners.

The commitment was reported in the pension's meeting agenda this week. It’s unclear if LACERS was one of the final LPs for which Blackstone left the fund open. A pension spokesperson did not return a call for comment.

Blackstone has not revealed a firm date for a final close, but is in the process of “rounding up the last couple” of commitments to the vehicle, according to Blackstone president Tony James, who spoke on an earnings call in February. On the call, James said BCP VI would close on around $15 billion; however, a recent media report from Reuters said the fund has collected $16 billion. Blackstone declined to comment.

Blackstone announced in February it had begun investing Fund VI. Earlier this month, the firm purchased a 40 percent stake in confectionery company Tangerine from UK-based lower mid-market firm Growth Capital Partners for an undisclosed sum.

LACERS is an existing Blackstone LP, having committed to the firm’s fifth fund that closed on $21.7 billion in 2007.

The pension, meanwhile, also announced this week it has ramped up its commitment to JH Whitney’s seventh fund with an additional $10 million. The pension had committed $15 million to firm in May 2010. The fund is targeting $800 million, according to sister data provider Private Equity Connect.

LACERS is planning to terminate its relationship with Pension Consulting Alliance and transfer the mandate for consultancy services to Hamilton Lane Advisers, a spokesperson told Private Equity International in a prior interview. Hamilton Lane is already LACERS’ traditional alternative investment consultant, but will assume PCA’s “specialised alternative investment consultant services” if the LACERS Board approves the recommendation, it said.

Specialised alternatives include investments with emerging managers, funds focused on underserved markets, demographically targeted partnerships and geographically targeted investments.

LACERS’ specialised alternative investments are expected to achieve “attractive risk-adjusted returns that complement LACERS’ traditional private equity programme.” The pension, which has $9.0 billion in assets, has a target allocation to alternatives of 9 percent and an actual allocation of 10.5 percent.